- USD/JPY quickly reverses an early dip to two-week lows, below mid-108.00s.
- Positive trade-related headlines prompted some intraday short-covering move.
The USD/JPY pair showed some resilience below a confluence support near mid-108.00s and rallied around 35 pips from near two-week lows in reaction to positive trade-related headlines.
The mentioned support comprises of 50-day SMA and over one-month-old ascending trend-line, which should now act as a key pivotal point for short-term traders.
It is worth mentioning that a Bloomberg report indicated that the US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal.
Meanwhile, technical indicators on the 1-hourly chart have quickly moved back into the bullish territory but are yet to catch up with the positive move on 4-hourly chart/daily charts.
Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the very important 200-day SMA (around the 108.90 region) before positioning for additional gains.
USD/JPY daily chart
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